Alex Atzberger Leads Ariba's New Life Within SAP

A Series of Forbes Insights Profiles of Thought Leaders Changing the Business Landscape: Alex Atzberger, President, Ariba

Ariba is a digital commerce platform born in Silicon Valley during the early days of the Internet. It was acquired by SAP in 2012 for $4.3 billion and is now under the leadership of its newly-named President, Alex Atzberger, Can one of the original digital commerce high-flyers retain its strong growth and entrepreneurial vigor inside one of the world’s largest software companies?

“I have now been in charge of the Ariba business for about six months. And I think, for me, the biggest task is to ensure that Ariba is the fastest growing startup company within a big business,” says Atzberger.

Alex Atzberger, President, Ariba

Atzberger, the former head of strategy who reported directly to SAP CEO Bill McDermott, describes SAP’s acquisition goals: “The companies that SAP acquires are the type of companies that SAP as a company wants to become. And let me just clarify this a little bit. What I mean by that is that SAP has a publicly stated goal about becoming a big cloud company powered by a solution called SAP HANA. And what that means is – to be a cloud company is that more of your revenue over time shifts to the cloud rather than coming from the traditional on-premise business. And next year is the first year when this is going to happen within the SAP business.”

That requires a different way of doing business than has historically been the case at SAP. Atzberger’s aspiration is to take the mindset of a founder as he believes founders take a particular attention and particular passion into every day that they apply to their business to grow it. “And that's exactly the same type of passion that I want to ignite around the Ariba business, and the same amount of passion that I bring into the business,” says Atzberger.

For Atzberger that means never being satisfied with the status quo. It means breaking down bureaucracies and the internal things that could limit a business from reaching its full potential. It also requires taking a vision that is very much transformational in comparison to where the world is at right now.

“I think the big part here is obviously the world of global commerce and how companies actually do business with each other. Because when you look at the tech stuff, you know, how companies internally operate, a lot of things get digitized. Companies have invested into their back-end systems. But when you really look at how companies connect to their customers or deal with their suppliers, a lot of those processes are still paper-based. They're still very complex. And a lot of the new generation workforce is really questioning about how do you actually do business with other companies and with suppliers in a more seamless, frictionless way?”

Ariba works to simplify how e-commerce is conducted between businesses, rather than optimizing the company within. One of the most recent examples of how the company is transforming that process is AribaPay, which is similar to what Apple Pay does, but just on the enterprise side. It means that a company can literally just click a pay button and everything else is taken care of in the background. There's no banking information needed. The payment is encrypted and automates the buying process for businesses in the same way consumers by their coffee at Starbucks today.

Ariba also captures the transaction information along with the payment information. In the past, companies had payments and they added information to it. “The point here is about how do companies embrace change, and how do you manage change? How do companies actually adopt these technologies? Today, we have two million companies that are part of the Ariba Network – the most global marketplace in the world, where there's nearly $1 trillion in commerce every year.

“It's a pretty well-kept secret that this is more e-commerce than on eBay, Amazon, and Alibaba combined. That's where I think the beauty comes in about being part of SAP. With SAP, you have a company that touches 60% of the world's transactions through its ERP solutions. And now, imagine you add the Ariba Network to it and you bring those kinds of customers onto the network. Some of the largest banks in the world, for instance, use Ariba to do all their procurement. As do some of the largest pharmaceutical companies, the largest metals and mining companies in the world. And when these companies bring all their suppliers onto the network we digitize their payments, their purchase orders, the invoices – now you have a platform with unmatched global scale,” says Atzberger.

Atzberger sees the Ariba e-commerce platform as not only transformative for business, but also a force for positive change in the world. The company just formed a partnership with a nonprofit organization called Made In a Free World, whose mission is to eradicate slave labor in supply chains. According to Atzberger, there are some 20 million people in this global economy who are underpaid, work in deplorable conditions or work in forced labor conditions.

“With our partnership, we can take a database of 40 million records about suppliers and actually see if that supplier might have forced labor within the products they are delivering to you. And if they do have it, it gets flagged on the marketplace. For me, that's a very practical application of what big data is really about. We now have 16 years of contextual data between companies and we can publish economic reports around what economic activity looks like in the global economy – and we might do so in the future. That gets me really excited,” says Atzberger.

Will Ariba stay as a separate brand under SAP? “Yes and no. Going forward, Ariba is going to be known as SAP Ariba,” says Atzberger. Prior to this role, I was chief of staff to Bill McDermott, the CEO of SAP. Bill and I spoke a lot about the identities of the companies we buy and the different options we have. So, we had one option that I'll basically call SAP Procurement. But then, the moment you do that, you're basically taking all of the inspiration away from these businesses. It would sound dull.”

“How do we maintain that service, that innovation, where people come to work and think about Ariba and say, "We have a bigger vision? We are not just trying to do procurement; we are actually trying to do something much bigger. And at the same time, though, there are dramatic benefits of being part of SAP. The things we do have in terms of size and scale.”

This means Atzberger is directly responsible for a workforce of 3,500 people. “I'm solely responsible for the results of the Ariba business.”

Atzberger’s peripatetic background seems particularly well-suited for the role. He was born in Hong Kong. His parents were from Germany and his entrepreneur father ran his own trading and import business selling German machinery into the Chinese market in the ‘70s that took him to Hong Kong. “What is so fascinating for me about this is that in many ways when I talk about global commerce, that's literally what I experienced as a kid sitting in smoky Chinese restaurants in Hong Kong, where my father was drinking rice wine with Chinese trading partners to sell machinery,” says Atzberger.

He worked a bit in the family business, but his father told him that the world is changing, and that trading companies business model would have to change with it. Why do you still need trading companies when all information is visible and accessible over the Web?

“I always took on the business owners attitude regardless of what my job was or who I reported to. I was always more focused on doing the right thing for the business, to have it grow. And if that meant to do something that maybe was in somebody else's job description, that would be fine. I think a lot of that common sense and a lot of that kind of thinking comes also from being part of an entrepreneurial family.”

A true man of the world, Atzberger now lives in Manhattan in New York City with his Japanese wife. “I spend a lot of time around the globe. And for me, that global part of where the world is going, and also providing transparency and insights – what we are doing with Made in a Free World, for instance – is so much more important because of that.”

“I'm not a founder of Ariba, but I very much feel that that's what I want to bring to the business, which is a compelling vision, an absolute focus on inspiring the company to do much more. And also feeling really proud of what SAP Ariba is and can become,” concludes Atzberger.